Distortions to Agricultural Incentives in Australia Since World War II

Description

Australia’s lacklustre economic growth performance in the first
four decades following World War II was in part due to an antitrade,
antiprimary sector bias in government assistance policies. This paper
provides new annual estimates of the extent of those biases since 1946
and their gradual phase-out during the past two decades. In doing so it
reveals that the timing of the sectoral assistance cuts was such as
sometimes to improve but sometimes to worsen the distortions to
incentives...[Show more] faced by farmers. Also, the changes increased the variation of
assistance rates within agriculture during the 1950s and 1960s, reducing
the welfare contribution of those programmes in that period. While the
assistance pattern within agriculture appears not to have been strongly
biased against exporters, its reform has coincided with a substantial
increase in export orientation of many farm industries. The overall
pattern for Australia is contrasted with that revealed by comparable new
estimates for other high-income countries.